NEW DELHI: Better than expected revenue and prudent expenditure has helped the central government in keeping fiscal deficit at Rs 4.7 lakh crore, or 31% of the full-year Budget estimate till August, and the government is confident of keeping it lower than the target of 6.8% at 6.5%.
Officials claimed that better than expected revenue and prudent expenditure helped the government to manage its fiscal deficit, which had reached 109% of the BE for the same period last fiscal year. They claim that the target is to keep the fiscal deficit below 6.5%.
“This was very difficult year and we had to take some difficult decisions. Certainly, it has helped, along with better revenue collection. Unless some major disruption happens, the target is to keep the fiscal deficit below 6.5%, even with opening up expenditure for the rest of the year,” a finance ministry official told TNIE.
Finance Minister Nirmala Sitharaman had budgeted a fiscal deficit target of Rs 15.07 lakh crore, or 6.8% of GDP. According to the official data released on Thursday, government received Rs 8,08,672 crore up to August, which was 40.9% of the Budget estimate(BE) for 2021-22, while the total expenditure was incurred by the government was Rs 12,76,681 crore, which was 36.7% of the BE.
Out of the total receipt, Rs 6,44,843 crore was tax revenue, Rs 1,48,650 crore was non-tax revenue, on the back of Rs 99,122 crore surplus by RBI and Rs 15,179 crore of non-debt capital receipts. The centre claimed Rs 2,12,606 crore has been transferred to states as devolution of share of taxes by government of India up to August 2021.
Of the total expenditure, Rs 11,04,813 crore is on the revenue account and Rs 1,71,868 crore is on capital account. Revenue expenditure was Rs 11.05 lakh crore against Rs 11.13 lakh crore, while capital expenditure was Rs 1.72 lakh crore versus Rs 1.34 lakh crore.
“Total revenue expenditure is just 37% of the budget amount mainly due to the curbs that were placed by the government. We may expect this to increase in second half as the government has asked ministries to spend their budgets,” said Madan Sabnavis, Chief Economist with Care Ratings.
Out of the total revenue expenditure, Rs 2,78,371 crore is on account of interest payments and Rs 1,47,398 crore is on account of subsidies. “We expect the Centre’s gross tax revenues to exceed the BE by at least Rs 2 lakh cr, said Aditi Nayar, Chief Economist, ICRA.
Core sector grows 11.6% in August
New Delhi: Low base effect helped India’s index of eight core industries to grow by 11.6% in the month of August, mainly due to an uptick in production of cement, coal, electricity, steel, natural gas and refinery products. According to the data released by the Ministry of Commerce & Industry, cement production during the month of August rose 36.3% and coal production increased by 20.6%. While the petroleum refinery production rose 9.1%, electricity generation climbed 15.3% on-year, the commerce ministry data showed. Steel production increased by 5.1% in August.